Effects Of Changes In Mining Patterns On Economy, Employment, And Wages In Australia

Problem statement

Discuss about the Statistics Economic and Business Research Method.

Australia is a vast country richly supplied with natural minerals. The major minerals in Australia are Coal, iron ore, petroleum, copper, zinc, and bauxite, natural among others (AUSTRALIA, 1952). The mining industry started in about the late 20th century. In the current years, there has been a great change in the mining industry relating to production and processing of minerals. This change has imposed impacts on employment and wages. This change is also reflected in sales and profit earned by the company thereby reflecting a change in the country’s economy. In this assignment, the change in mining pattern of the country will be studied. The effect of the change on employment pattern, the wage of laborers, operating profit before taxes and the industry value will also be analyzed.  Alongside, an outline idea about the data collection methods and analysis will be provided.

Currently, a great change has been evident in the Australian mining industry through the production of the mining patterns. This change has imposed positive and negative effects on distinct bodies such as country’s economy, employment, and wages (Fleming and Measham, 2015). Therefore, the problem statement of this project is to find out:

The change in mining patterns of Australia since 2010.

The effect of this change on employment pattern, salaries, operating profit in the industry.

Mining industries in Australia started from the European settlement which initiated quarrying of stone and clay for bricks formation. As it strives to enhance the economy, the mining industry brought it new mining patterns which have many impacts on labor, wages and hence, the economy as a whole (SHORT and WOODROFFE, 2009). Mining activities contribute greatly in boosting the economy. Mining generates about 54 % of total goods and services of the country and contributes about 6-7% of country’s GDP. However, the economy is lowered by the same subject matter, due to change in mining pattern, hence raising a point of concern (Hall, 2010). Initially, the mining industry had depressions and booms (Zhang et al., 2015). However, the discovery of gold made it contribute greatly to the economy of the state (Downes, Hanslow, and Tulip, 2014). In fact, the industry began to provide basic equipment such as fuel, construction materials and raw materials used in other industries (Measham et al., 2013). The industry also initiated decentralization both from industrial and population perspective; towns, railway, and sports were established, presenting a remarkable review. It was considered an emblematic ‘old economy,’ because key resources were exported at low values (Fleming et al., 2015). However, in the beginning, this poor economic picture changed drastically.

Literature Review

At one point of the Australian mining history, the industry shifted from the processing of metals, transforming the sector into a new look especially for labor patterns; people who were employed to work in the metal processing industries lost their jobs and wages at the same time (O’Shea et al., 2008). Along the same line of the shift, more people were employed to mine and process iron, coal and natural liquefied gas (Ferguson, Pündrich, and Raftery, 2014). As years passed by, investments in mining rose leading to more income and hence, economic growth. The expansion of iron ore and coal extraction lead to commence of several big LNG projects due to the rise in demand for natural gas. After that, there was more expectation of economic sustainability by 2010. Apparently, this was evident due to the increase in investments, and more consumers of mineral products such as natural gas, iron ore and coal (Frost, 1986). Besides, the investments were aimed at providing more employment opportunities.

The mining industry employs about 2% of the laborers of Australia and also supports a large number of industries (Fleming and Measham, 2015). By providing job opportunities, the industries, and related investments contribute indirectly to the growth in the economy. Employees were entitled to different wages depending on the state of the employer (industry), and personal qualifications (Cavallaro, 2010). The wages are also subjected to direct taxation hence, a clear way in which change in mining pattern affects the economy indirectly. To sum up, change in mining patterns affected economic growth positively by creating more job opportunities which resulted from the shift to the extraction of iron ore and coal in the last part of the last decade (Australia Sees Hope for Coal, Iron Ore Price Rises, 1999). Indirectly, the change in pattern boosted the economy by initiating more investments. Such investment initiated government income through tax (Middelbeek, 2012).

Even though the change in mining pattern led to economic growth, it also a caused an undergrowth in the economy. As mentioned earlier, there was a shift from metal processing to mining of other minerals mentioned above. The report has also highlighted that the change leads to loss of job for those who were working in the metal processing industry. Therefore, the shift had a negative impact on the economy from two perspectives. Together with other related factors, it led to 7.4% decrease in value added of the mining industry. Secondly, loss of job by people who were working in the company denied them chances of making the investment and hence, preventing their active contribution to the economy (Reeson, Measham and Hosking, 2012). Besides unemployment cases brought by the change in mining patterns, various employees and wages were also affected.

Research Objective

Like any other company in Australia, the rate of employment and wage changes took place in the mining industry; employees with recommendable skills were highly valued hence, paid considerably compared to employees with little skills. As a result of changes in mining patterns, there was an increase in working hours to 45 hours from the initial 35 hours a week (Edgar and Institute of Family Studies, 1980). Furthermore, extra hours on duty earned zero income for employees in some cases; they were not paid for an overtime work. This affected employee’s wages negatively, making them lack required enthusiasm of commitment. To sum up, the impact of the change in production of mining patterns have imposed both positive and negative impact on the economy, employment and on wages. The impacts include economic growth, an increase in working hours and employment opportunities.

This report proposes to review the effect of a change in production of mining patterns and its effects on the mining industry, employment, and wages. Through this review, the report will obtain the following objectives;

Explain the state of Australia economy before and after changes in production of mining patterns.

Determine the strength of these changes to labor, wages, and employment.

For a state’s economy to be stable, all areas linked to it must be promoted. Therefore, preservation of factors such as employment, industries, labor, and investments is of great importance. As shown in the upper part of the report, there are various ways in which the mining industry through its pattern has affected the economy and related factors related. While a company strives to boost its profit, it should also focus on the economy as that the determinant for the latter’s progress. Therefore, shifting from metal processing industry was a bad impact on the formation of mining patterns. Besides creating other employment opportunities, it cut off other workers’ employments. This does not only affect the employ’s wage income but also the state’s economy. Likewise, elongating working hours from 35 to 45 with zero earnings was a bad idea; it may make workers to lack commitment hence, low productivity. Therefore, adjusting the mining patterns to support more employment, reducing working hours back to the initial 35 and offering payment for any overtime work will be of great help to the economy. Besides, addition, it will promote the growth of the mining industry.

The impact of the change in production of mining patterns and its effects on the mining sector, employees and wages are as follows; there is a level of economic growth as a result of the extension of mining activities and related investments. However, the economy may also depreciate due to the closure of the metal processing industry back in the 2000s, which apart from reducing employment, it also affected wage income for some workers. Increase in working hours is also evident. Therefore, the following are the questions of this research project;

Research aim

What are the changes in the mining industry since the year 2000?

What are the effects of this change in operating profit earned by the industry, employment and wage figures in the industry?

Research Design and Methodology

Research Questions

What is the comparison between the currents’ economic status and the status back in 2000s?

What are some of the changes that have experience in the industry’s employment pattern?

How have the changes in mining patterns affected employee’s wages?

Being in search of secondary data, I visited the company’s website (Australian Bureau of Statistics), and extract historical data on employment pattern, various wages entitled to distinct employees, and the company’s contribution to the state’s economy. I also obtained data on the company’s profit trend which was readily available on the mining industry’s profile.

Materials

Computer

Wireless internet connection

Research Expectations

By taking the above steps, the report aimed at the following expectations;

Economic growth

Creation of more job opportunity (Van der Plank, Walsh and Behrens, 2016)

The increase of working hours.

Better wages

Below is a Gantt chart section presenting my routine and qualifications for coming up with the proposed research. To obtain the objectives of the report, I followed the routine shown in figure one bellow. Because I had already presented a literature review on the impacts of mining patterns on economy, employees, and wages, I will spend most of the time to sort through the to obtain the findings and present.

Gantt Project	Week 6	Week 10	Week 14
Task 1	Literature Review
Task 2		Data Collection/ Analysis Report
Task 3			Data Collection/ Analysis Report

Figure 1. Schedule for completion of the literature review. The formal presentation is in the 14th week.

After collecting data, various statistical methods were used for analysis. Some of the analysis revealed that wages of employee vary according to working level and skills. According to the analysis, data on the mining and production of coal came out as a time series data. The different components of time series were then analyzed. The time series analysis includes: Trend analysis: To check whether there is any trend (increasing or decreasing) in the welling values. Seasonality: To see if there are any seasonal fluctuations in the values. Cyclical fluctuations: To determine whether there is any oscillatory movement in the time series. Irregularity: To see if there is any irregular pattern of circulation in the data (Montgomery, Jennings and Kulahci, 2015). Apart from seeing the impact of the changes on profit, laborer, wages, capital, cost, inventories a regression analysis are also carried out. Lifting a linear regression was equally considered necessary. It was revealed that the income is the independent variable, while expenditure, wages, salaries are dependent variables. A significant value of the regression coefficient will indicate the variable has a major effect on the value of income (Grömping, 2012).

Research Design and Methodology

Through appropriate analysis, the research has come up with the following findings:

The mining industry patterns have resulted into

• Economic growth
• Economic depression (to some extend).
• Some job opportunity has been crested
• Some job opportunities were lost
• The increase of working hours from 35 to 45 (Search.abs.gov.au. 2016).
• No, pay for extra hours on duty hence, low wages.
• Variables and Hypothesis

The primary variables concerned in this study are production figures of different minerals, income or profit generated from selling these minerals, various other factors like wages, employment, inventories purchased, etc. The production figures and income are independent variables. On the other hand, wages, employment, inventories to be obtained depends on the output data. So these are dependent variables (Trudinger, Walter and Ralph, 2013). The hypotheses that are to be tested in this research work are:

There is any seasonal or cyclical pattern in the production figures.

The employment, wage figures, cost of inventories are dependent on income figures.

The problem in this research work is to estimate the effect of change of revenues in employment status, wage value, labor, and capital in the mining industry. The variables of income are measured regarding millions of $. The other variables like wages, expenses, labor costs, and change in inventories are also measured in millions of $. The figures of employments are measured in number. Since the figures are for the whole mining industry and quite large, an error of about 5% can be tolerated. The data is secondary data has been collected from Australian Bureau of Statistics. The data is subjected to non-sampling errors.

Conclusion

Mining industry contributes to about 8.5 % of the economy of Australia. It provides 2% job opportunities to the citizen, whose wages are determined by the mining industries. The shift from metal processing by the mining sector in 2000 resulted in the loss of jobs. The shift to coal production of natural gas and iron ore created more employment opportunities apart from boosting the economy directly. Adjusting working hours from 35 to 45 with zero compensation lowered wages and hence, reducing enthusiasm of workers resulting in small production. The proposed research will help in achieving the following objectives: (1) identify various effects of changes in production of mining patterns to the mining industry, economy and wages (2) determine adjustments that drilling patterns can adjust to boost the economy further. The research intends to include a formal presentation on the 14th week of the academic calendar.

References

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